The Pabst HotelFrom the November issue: Workers began what is considered to be the nation’s first demolition of a building constructed using the revolutionary steel-frame system 109 years ago this month, when they started dismantling the nine-story Pabst Hotel to make way for the New York Times headquarters.
Skeptics of the steel-frame engineering — which first came into use in the mid-1880s, leading to the proliferation of skyscrapers — thought buildings’ support structure would rust or weaken over time. “In the minds of a great many people the impression is firmly implanted that the steel frame will continue in use until a ‘skyscraper’ collapses in a pile of rubbish and a cloud of dust” as a result of corrosion, a writer in the Times wrote that year.
The deconstruction of the Pabst building at the intersection of 42nd Street, Broadway and Seventh Avenue gave developers the first chance to see the impact on a steel building over time. Click here for more real estate history. Compiled by Adam Pincus [more]

Themed restaurant chain Jekyll & Hyde is moving out of its flagship club at 1409 Sixth Avenue later this year, and in the meantime, the landlord has put the building up for sale for $19.5 million.

The ornate, five-story property, between 57th and 58th streets, belongs to developer and Holocaust survivor Sam Domb, who owns both the Travel Inn and the Belvedere hotel in Midtown and the Lucerne hotel on the Upper West Side. Jekyll & Hyde currently occupies the entirety of its roughly 12,000 square feet, which is also being marketed for lease to single-tenant users for $600,000 per year by Newmark Knight Frank. According to Alon Chadad, one of five co-founders of brand-new brokerage Blu Realty Group, he and his colleagues have been quietly marketing the property to buyers for the past two weeks. Comments

229 West 43rd Street

Private equity firm Blackstone Group paid $160 million for the top 12 floors of the
old New York Times Building at 229 West 43rd Street, owned by a partnership of
real estate developer Africa Israel USA and private equity firm Five Mile Capital,
the sellers announced in a statement.

Blackstone bought the office condominium comprised of a portion of the 4th floor
as well as floors 5 through 16, Africa Israel said in the statement. The sale closed
this afternoon.

The exact size of the condo was not released, but public records indicate it is
about 600,000 square feet of the 745,000-square-foot building, which would
amount to a price of $267 per square foot. [more]

Africa Israel USA is “actively looking at new opportunities” for residential conversion projects in New York City, new CEO Tamir Kazaz told the New York Times. Kazaz, who stepped up to the company’s helm after Richard Marin resigned suddenly late last year, was relatively tight-lipped when it came to his predecessor, but characterized the split as the company’s decision. (Sources had told the Wall Street Journal at the time of Marin’s departure that it was unexpected and came amid disagreements with senior management). Now, with a third of the debt it had two years ago, Lev Leviev’s development company is moving forward and eyeing a Financial District office building for a condominium conversion, Kazaz said. [more]

Discount department store Daffy’s has inked a deal to lease 28,000 square feet in the former New York Times building in Times Square, according to the Wall Street Journal, in a coup for Africa Israel USA, which had been struggling to find tenants there since it purchased the property at the height of the market. Last year, the company changed course at the 750,000-square-foot building, at 229 West 43rd Street, moving to convert it into retail space, a hotel and condominiums instead of attempting to fill it with office tenants. [more]

Richard Marin, chairman and CEO of Africa Israel USA has resigned suddenly and left the company after just two years on the job, the Wall Street Journal reported. Tamir Kazaz, the company’s CFO, will take over as CEO but Africa Israel does not plan to appoint a new chairman. It doesn’t appear to have been an entirely amicable split, with sources saying Marin’s departure came unexpectedly and amid disagreements with senior management. [more]

The seven floors up for grabs at the old New York Times headquarters at 229 West 43rd Street are expected to draw about a dozen bids by today’s submission deadline, which was extended by a week due to increased interest, Crain’s reported. The plan to convert the space into a 400-room hotel will be part of an ongoing effort to transform the former office building into a mixed-used property that will include condos, restaurants and stores. More than 70 hotel operators had previously expressed interest in operating the Times Square property, according to Richard Marin, chairman and CEO of building owner Africa Israel Investments USA. Experts say the location would be ideal for anything except a super-luxury or down-market operator. According to Jon Fox, a hotel consultant at PKF Consulting, Africa Israel wouldn’t want a limited-service or budget hotel since that would be incompatible with its own plans to develop high-end condos at the top of the building. Africa Israel bought the 79,000-square-foot, 15-floor building for $525 million in 2007 and tried unsuccessfully to attract office tenants to the building before opting to reposition it. More than 60 percent of the lower levels has already been leased out to retailers. [Crain's]

[more]

AFI USA is looking to sell 345,000 square feet in the former New York Times Building in Times Square to a luxury hotel developer in the wake of its $85 million renovation and a refinancing for the property. Newmark Knight Frank’s Jimmy Kuhn and Neal Golden are marketing the space, which includes part of the ground level and fourth floor, as well as the fifth through 11th floors, and sources told the Post it could go for around $200 million. [more]

From left: Daniel Horowitz and Ira Schuman of Studley

Daniel Horowitz and Ira Schuman of Studley won the Real Estate Board
of New York’s “Ingenious Deal of the Year” first-place award for their
sale of Hunter College’s 127-133 East 79th Street, at a reception last
night at the 101 Club. Second place went to Eric Deutsch and Ken
Meyerson of CB Richard Ellis for their lease to the Gap at 40 Worth
Street, and Cushman & Wakefield’s Michael Rotchford won third place for his sale and
leaseback financing deal at the New York Times Building. Click here for the full list of nominees. [more]

From the February issue: It’s been a sort of parlor game in New York’s real estate community for
some time: speculating on whether peak-market buyers will hold on to
their highly leveraged properties.
Then, in a move that shook the industry last month, Tishman Speyer
Properties and BlackRock Realty decided to turn over the keys to the
$5.4 billion Stuyvesant Town and Peter Cooper Village.
But not everyone has gone this route. Other overextended borrowers
have kept control of their properties following a debt restructuring,
including developers Lev Leviev and Joseph Moinian.
As part of a workout — the complex process that’s often decided by
the leverage each party has in the development — the bank or private
equity firm must weigh its options.  [more]